Adding a New Location to Your Eye Care Practice? 7 Things to Think About.

If your practice is doing especially well, you might consider of opening up a second location. After all, you’ve done it once, so it should be easier the second time around, right?

Not so fast, says Michael J. Parshall, a healthcare business consultant who spoke about strategic planning at a past annual meeting of the American Academy of Ophthalmology. You’ve got to use facts, not opinions, he says. It takes a lot more than the desire to duplicate your current success to make a second location work.

Analyze data in these 7 key areas. The results will help you decide whether a second office is a prime opportunity or a pain in the you-know-what.

Know Your Patients

You need to know who your patients are, where they are coming from, and what services they’re receiving. Only then will you be able to identify the geographical areas holding a patient base that makes sense for you.

Use your practice management system or EHR data to run the numbers on patient demographics. Also look at characteristics like diagnosis, number of visits per year, and revenue per visit and per year.

Your ophthalmology EMR should be able to run one of the most helpful reports: a zip code analysis, Parshall says. Why? Say that a significant number of patients are visiting you from an adjacent area outside of your home territory. That’s a clue that their area is underserved by your specialty. That could be a great opportunity for expansion, either for you—or for a competitor.

Know Your Referrers

Referrals from other physicians are a significant source of business for most medical practices, but especially for specialists. The more varied your referral sources are, the easier it will be to translate that level of referrals to a new location.

Use your ophthalmic EMR software to pull the data on your referrals for the past two or three years, advises Parshall. Analyze the data in terms of their demographics, geographic location, and referred patient diagnosis. Then, rank your referral sources to determine the most valuable, and use that information to inform your decision on expansion.

For example, say you found that many of your referrals come from primary care physicians. If, during your market research, you find that a large primary care group is opening up in a location just outside of your home territory, it could be a good opportunity for expansion.

On the flip side, you may want to avoid locating to an area anchored by a large hospital or health system. If that system has affiliated specialists nearby, you won’t be able to count on them for many referrals.

Know Your Market

Detailed market research will help you assess the potential of any expansion opportunities. Data sources for market research are plentiful, Parshall says. He recommends starting with publicly available information from places like:

Look at things like population demographics, socioeconomic data, geographic growth trends, and projected roads and improvements. Sometimes this data is free; other times you’ll need to pay for it. Does the amount of data gathering and analysis necessary sound overwhelming? Consider using a market research firm to compile that data for you.

Parshall suggests making a map to better visualize the data. Take a map of your geographic area and overlay it with the market data you’ve found. Patterns will emerge that can guide your decision towards areas ripe for expansion. Those patterns may suggest:

Going on the offensive

Have you identified an opportunity to expand into a new market? Perhaps there’s an area where the population has been trending towards your target market’s demographics. If you have a pediatric practice, that could be an area with lower home prices that’s attracting young families like wildfire. For a comprehensive practice, maybe a new highway has kick-started development in a previously rural area, yet office space is still reasonably priced.

Defending your territory

If you are ready to expand and have identified an underserved area, move quickly—you’re likely not the only practice with an eye for opportunity. It’s often easier to set up shop in a new market, rather than a mature one where the population is already loyal to their providers. If another practice makes the move to expand first, you’ll have lost that opportunity, not to mention that there’s now an increased chance that some of your patients could be poached.

Office Dynamics

The way your current office functions is a key indicator of whether or not your second location will be successful. Any inefficient processes or problematic staff behaviors will carry over to the new location, so shore up your operations and make sure your optometric business solutions are in order at the main office before branching out.

You’ll also want to take a close look at your staff, including physicians. Hiring and training new staff is expensive and time consuming, and a stable workforce is instrumental in getting your new office up and running. For example, if a physician or key administrator—like your billing manager—leaves the practice, your revenue could take a dip while you find a replacement. If you were depending on that income to fund the new location, you could end up behind before you even start.


When you open a new location, you increase your overhead without any guarantee that your revenue will increase to support that. Every day that your new office isn’t functioning optimally is another day you could be falling behind financially. To up your chances for success, plan and implement an aggressive marketing strategy for the second location.

Direct mail can be an effective way to let the surrounding area know that you’ve arrived, but be sure to look beyond traditional marketing methods. A grand-opening open house, kick-off trunk show, or a seminar at the local community center are just a few outside-the-box ideas.

Your current patients

The last thing you want to do is alienate your current patients by focusing all your attention on the new location. They could become concerned that you plan to abandon the area, or they may feel like the new location will negatively impact the top-notch care they’re used to receiving.

Spend some time reassuring your current patients that you plan to stay—after all, it’s their loyalty that has allowed your business to expand. A little communication goes a long way. Consider having staff had out a short letter to patients as they check out describing your expansion and your intentions for your current office.

Your competitors

An area with a high population to professional ratio could be ripe for expansion, but that’s not the only factor you should consider when it comes to other practices. You also need to think about the quality and other characteristics of those competitors. If you offer services that existing practitioners in the area don’t, if you have expanded office hours or are located more conveniently, or if the existing practices are terrible at marketing, for example, your practice could easily hold its own.

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